What's Wrong With the Finance Committee Bill? An Interview With Sen. Ron Wyden.

Sen. Ron Wyden is another Finance Committee Democrat unhappy with the Baucus's initial proposal. Wyden's Healthy Americans Act, co-sponsored with Sen. Bob Bennett, is widely regarded as a good piece of legislation that's simply too radical for the current Congress. But it's given him enough credibility in the debate that on Wednesday, he was one of two Democrats Barack Obama invited to the White House to discuss health care. Wyden has put his weight behind "The Free Choice" proposal (pdf), which would amend Baucus's bill to give all Americans access to the Health Insurance Exchanges. I spoke with him Thursday afternoon.

You and Sen. Bob Bennett met with the president on Wednesday. How did that go?

The President really likes Bob Bennett. And vice versa. At one point, the two were kicking around Utah politics, and I just offered to let them put together a deal of their own and introduce it into the Senate Finance Committee. The president turned to me and said, “I like you, too!” It was very funny.

I spent my time talking about the point Obama uses at every rally. I said, “Mr. President, I memorized it verbatim. You say ‘everyone should get the same deal as members of Congress.’ ” But you take the text of these bills, and not only are you not getting the same deal as members of Congress, who get a dozen or more choices in the D.C. area, but people aren’t going to get any choice at all. It’ll be tethered to a policy that many people might think is pretty crummy. Some of those policies will be high-deductible, going up 10 or 12 percent a year. And people are going to think that’s pretty crummy.

What’s the mood among Finance Committee Democrats right now?

I think that in the Senate, the flashpoint has become affordability. And the flip side of affordability is choice. If you have a policy you’re having problems affording now, and some government official says you need to keep it, that’s not going to make you very happy. Plus, you don’t have a chance to make the system better, not just for yourself, but for everyone else, by making choices and creating competition among insurers.

As for the people who don’t have coverage and are making $65,000, those people look at Washington and see us saying you’ll have to pay 13 percent of your income, and then we’re going to clobber you with all these co-pays and deductibles, and some government official comes and says, ‘We’ll give you an exemption’? No middle-class people will be attending rallies holding signs saying “thank you for my exemption!”

You’re sort of dancing around your Free Choice Act here, so let’s talk about it. Do you have any co-sponsors?

We’ve not been doing that yet. At every stage, you’re trying to come up with a strategy for finance and then a strategy for the floor. This is the period we felt we’d have the most leverage. If you’re not a committee chair, you’re always looking for the point of maximal leverage. But we now have a situation where in both the White House and the committee, people are starting to say we need to assemble the votes to move the legislation out of committee and off the floor. As you know, we’ve changed strategy even in the last 10 days. As you know, for many months, Sen. Bennett and I waited quietly in the Senate, and now we’re taking a different approach, making sure people understand what we’re trying to do.

Let me ask you about some of the concerns people have on this bill. One is that it will hasten the decline of the employer-based system. Young workers will leave quickly for cheap, catastrophic plans on the exchange. Workplaces will be left with older, sicker workers, and they won’t be able to continue offering health-care insurance.

That just doesn’t make sense, either from an economic standpoint or the nature of American life. First, companies will continue to see good benefits as a recruitment tool. It remains a primary way to attract young, talented workers. Second, as we look at this in terms of who would leave, I don’t get the sense that young, healthy workers will be the first to traipse off. Are they really going to be the ones to fill out the forms and contact the exchanges and all that? I think the most likely to go shopping are middle-class people who are pinched right now. We’ve also put into the bill safety valves for any worst-case scenario: after-the-fact risk adjustment that will review who stayed and who left and make adjustments based on that fact.

If what we’re saying is that we can’t find a sweet spot between blowing everything up in 15 minutes and telling people that you can’t improve your situation and have more choices, we’re not doing our job. And I think this is that sweet spot.

Another argument I’ve heard is that this will change an employer’s ability to bargain for insurance. Right now, they go to an insurer and say, “I’ve got 500 employees, what can you give me for that price?” But if 125 of those employees could leave, or 300 could leave, that might change their ability to secure and protect a deal.

Imagine that Ezra Electronics has been working with a particular insurer for six or seven years. Ezra Electronics gets more leverage. Under this bill, Ezra Electronics can get out and go to the exchange unless the insurer gives him a better deal. And so can individuals. Free choice means additional options for employers and employees. If your insurance policy knows you can leave, they will work harder to keep you.

Let’s put free choice aside for a second. Is the affordability sufficient?

The bill, as it’s written today, is going to make it very hard for a United States Senator to go home, look middle-class people in the eye, and say I helped you get health security. Unemployment rate in Oregon right now is 12.2 percent. I don’t think the legislation, as written, is going to meet the middle-class person’s test of health security. I told the president of the United States that I’m going to do everything I can to fix this bill.

How about the “free rider” provision?

I think it’s anti-hiring low-income workers. Changing it is extraordinarily important. We’re in discussions with the Center for Budget and Policy Priorities about how to do it.

Final question: If not a word of the bill changed, could you vote for it?

As it is currently written, the legislation doesn’t fit my definition of what’s needed for the middle class.

Seriously, I applaud Sen. Wyden's efforts to not only work on improving the current finance committee bill, but also in setting aside his own bill (which I am completely in support of) and working with a very mediocre bill and trying to get it to being passable.

Ezra, thank you for your ongoing hard work bringing us the inside scoop and analysis of what's going on...

One question - I don't know if your interview transcript represents the entire interview, or if you edit it down. However, I was wondering why you didn't ask Sen. Wyden about Pres. Obama's reaction/response to his points. Sen. Wyden articulates the position he took but then stops there. I was just wondering whether there is more?

also, is there any indication of how successful amendment proposals from wyden or rockefeller might be in committee? obviously it's going to vary amendment to amendment, but how long will the committee continue to amend this mark until it gets out onto the floor?

I put this post up Wednesday as an aide for people wanting to weigh the possibility for amendments.

There are 23 Sentors on Finance split 13 D to 10 R. Meaning that if all R's show up and vote reliably no on everything then any two Dems can block action.

What I don't know is precise committee rules on quorums. If say five R's just don't show up for any given markup session you would still have a clear quorum of 18. Does that mean you only need 10 votes to approve an amendment? What if every R except Grassley, Hatch and Snowe decide they have better things to do. That gets you down to 16, still a quorum but now either Baucus or Rockefeller would only need 9. So a lot depends on the answer to that question. I look at the list of Finance Dems and see clear paths to 9 votes for a PO.

I was listening to right wing wacko radio and they love this plan. I can't figure out if it's because it has the word "Free" or because they think it's going to make people so mad it can only help Republicans.

I don't think it will pass because of union and health industry opposition. But we'll see.

Wyden's premise which is shared by some of the public option advocates is that competition among insurers will hold down medical costs. This has yet to happen anywhere in the world and is simply an article of faith. For competition to hold down costs one would need for buyers to be able to compare products and prices...but as we know with private health insurance or at least a competitive health insurance market that information will always be flawed due to the nature of how medical expenses are incurred.

Wyden has a consistent position, which has excited pundits such as yourself, but it is premised on flawed assumptions about health care cost containment.

Has anyone in Congress suggested that people just pay for their own healthcare? I thought it was quite funny that Olbermann was ranting about families actually having to pay up to 13% of their income for healthcare (at an income of $65,000). You would have thought somebody farted at his dinner table.

Which family should pay for your healthcare when you make $65,000 per year, the family making $70,000 a year? Why not call the Baucus Bill something like “The Paying for Someone Else’s Healthcare Act of 2010?”

Of course middle class families should be paying for their own healthcare costs UNLESS they can’t get insurance AT ANY PRICE (those are the people taxpayers should help). There are not enough “rich” people to pay for everybody’s healthcare no matter how high the tax rate is (I’m assuming an upper bound tax rate of 100%).

Kingstu,
You seemed to have missed the entire point of healthcare reform. Either a society commits to universal healthcare or they don't. You are not committed to it, obviously, due to your belief system. If a society commits to universal healthcare then people
a) need to be required to pay into the system (hopefully a public benefit and not a private profit-driven system)throughout their lives.
b) people will be paying for others healthcare because of wide variations in the cost of different conditions and health outcomes of accidents.